Skip to main content

tv   Power Lunch  CNBC  March 19, 2013 1:00pm-2:00pm EDT

1:00 pm
combining your customized charts with leading-edge analysis tools from recognia so you can quickly spot key trends and possible entry and exit points. we like this idea so much that we've applied for a patent. i'm colin beck of fidelity investments. our integrated technical analysis is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. [ male announcer ] you are a business pro. governor of getting it done. you know how to dance...
1:01 pm
with a deadline. and from national. because only national lets you choose any car in the aisle... and go. you can even take a full-size or above, and still pay the mid-size price. this is awesome. [ male announcer ] yes, it is, business pro. yes, it is. go national. go like a pro. it is that time begin. time for the final trade. we begin with joe terranova. >> amazon. >> simon baker? >> lululemon is getting shorter and going down.
1:02 pm
>> stay short, bhb. maybe sent to buy. >> all right. that does it for us. have a great day. watch "fast money" on twitter, scott wapner on cnbc. we're watching what the euro is doing. that story is being picked up now. >> "halftime" is over. good afternoon, everybody. the exclusive fed survey is here and respondents are answering. russian revenge. moscow apparently not pleased with the plan to tax the bank accounts over there in cyprus. they are going to take a big hit. what might the russians do in
1:03 pm
response? you might not want to know. >> now, it was one of the hottest real estate markets in the united states and then one of the coldest. once again, it is hot. there is no room at the end or the condo. sue, doesn't miami sound pretty good right about now? >> it sounds so good right now. it's raining again in new york city. you mentioned at the top of the show, cyprus moving the markets up and down. new headlines from cyprus forced a selloff on wall street. we have recovered some of the those losses. we are still down 39 points, though. parliament is meeting now. bertha coombs is monitoring that from the breaking news desk. hi, bertha. >> they have been in session for about an hour now. they are expected to go at least another hour. here are the headlines as we've had them this morning. they are debating this bailout proposal and to a man so far, they are all saying no.
1:04 pm
the governing party, apparently, has prepared a one-day postpone meant on the vote because at this point they are prepared to have sustained. cyprus' finance minister, who headed to moscow to appease some of the russian depositors has offered his resignation. people are observing what is going on in parliament. the euro has fallen the lowest since november 22nd. we're also hearing that the british ministry of defense is airlifting about a million euros to be distributed because the banks remain closed in cyprus. >> bertha, thank you very much.
1:05 pm
another story involving fake facebook shares. scott cohn has been looking into it. >> the facebook ipo and how hyped it was, how everybody wanted to get their hands on the pre-ipo shares. a man, 71 of florida, allegedly told investors that he had shares and raised about $8 million, it was all a ponzi scheme. he's charged in a four-count criminal complaint as well as a civil suit by the security and exchanges commission. could face up to 20 years in prison. he claimed he had pre-ipo shares of linkedin and zynga and groupon, none of which he had. he was arrested in florida, charged in new york and will likely be back up here for a court appearance. >> nice little game he had going for a while. >> for a while. >> scott cohn, thank you very much. >> sue?
1:06 pm
>> now to the cnbc exclusive fed survey and it deals with the "r" word, recession. steve liesman has more details on that. hi, steve. >> thanks very much, sue. we're here with the growth forecast from our 54 respondents. first i'll show you what the gdp -- i guess we're going to do the recession here first. you can see back in september 2011, when we're dealing with debt ceiling, the probability of recession by this group, 36%, fell to a low of 19% around the winter of 2012. remember when everything was being looking good, it dipped down again. the probability of recession went up again. now it's fallen again for the second straight month. 2011, 17.6%. not quite off the charts because we still have room here but it's the lowest that we've seen since we began asking this question. i don't know if we have the growth forecast chart here, guys, if we can go back to that. here are the actuals. year over year gdp, 2.6, 1.8,
1:07 pm
lackluster and picking up to a lackluster not great 2.6%. i want to share with you some views of the economy from our 54 respo respondents. firming housing prices are a game changer. there is something much more self-feeding about recovery this year. could be a turning point. the objepposite from john rober. we believe a recession/economic slowdown is a possibility in the latter half of 2014 or early in 2015. some of the excesses that could cause a recession are beginning to build in the economy. another piece of data, the biggest problems facing our economy, taxes/regulation, 29%. i would say that's a victory given that europe is not in there for fear of recession is not in there. too much deficit reduction, 16%.
1:08 pm
slow job growth, 12%. too little deficit reduction, 10%. guys, these are more normal problems, i would say, than we've had in the past. the european financial crisis, u.s. financial crisis. sue, i would take a victory, yes, there are problems out there. >> i totally agree with you. it's the first time in a long time we haven't seen europe on a list like that. >> thank you, steve. >> absolutely. thanks, steve. >> sure. >> the markets here are a little lower, not all that much, though, given what we've had in headline risk this morning. dow jones industrial is down 38 points and s&p is off about 9. bob pisani is here to tell us what is going on. there's a lot of headline risk in the market today. >> and we're back moving on europe now. >> exactly. given 38 to the downside is not that bad. >> even europe is not reacting that much. let me show you the euro. everyone goes crazy talking
1:09 pm
about the euro. perhaps the finance minister may be resigning, we're trying to confirm that for sure. that's what we've been hearing. and on words that the governing body there, the party of the majority may not even vote on the vote itself. the euro dropped. so the dow jones industrial dropped on that news. in fact, put up the dow, you can see it's in parallel and you can take a look now at the two main etfs here. the u.s. stock market, total market, etf, you can buy that. there is ivv. they are moving in tandem here. people ask me, gee, why is this happening? i'll put it simply, right now the ecb and imf have it. if they don't pay a tax, 85.8 billion euros, they are going to stop providing assistance to the banks. they will provide assistance, no deal on taxes, no deal to provide assistance to the banks and the countries need the
1:10 pm
money. >> russia is the wild card in all of that. >> i know. >> supposed to be going to russia tonight. how would you like to be a flien oh the wall for vladimir putin. >> i would love to be a fly on the wall. >> a deal maker on wall street, he's put that aside, start-up investor, a venture capitalist, chairman of the robin hood foun i gue f foundation. here to weigh in on the market and recession fears, welcome back. >> thank you. >> i know that stock market forecasting is not your game. neither really is economic modeling. i'd like to get your thoughts on where we are, the united states, economically right now and whether you think the growth in the stock market is sustainable and based on a firm foundation. >> well, once again we've had a
1:11 pm
first quarter which seems like a really great year. there's a right of spring that's happened in the last three years with four in a row, which is encoachment of european concern tends to drag down the stock market. >> we have seen this move before. >> yeah. this is the fourth time through. more important, between housing, companies have aligned and focused. they've got their priorities set, they are sitting on at least a trillion dollars of cash and i've talked to ceos all across america. what they are saying is we are better than a big sideways. it's slow, steady progress. business is better. >> business is better. better than a big sideways. so you look -- as you say, the europe issues are serious, aren't they? it is not resolved yet. >> they are an important counterparty and we cannot have a better economy than theirs and everything going on in cyprus is a reminder of the structural flaw in euro. >> jack lew's first overseas trip to china as secretary
1:12 pm
treasury is in china. there he is greeting the new leader of china. a lot on his mind, including hack attacks from china and working on china to comply with intellectual trademarks. you know, peter, you have long warned about the u.s. falling behind china in the global economy. that's your book right there. i told you the title is not one that you will forget. if you have little ears, cover them. how is it going right now? there are sensitive issues on the agenda. >> it's an extremely sensitive time and it's important that the first foreign dignitary that president jinping since last september when defense secretary
1:13 pm
panetta made a trip. >> that's not frequent enough for you? >> that relationship management is nowhere intense enough. by the way, it's important to note that the first foreign trip that president xi is making is to russia with president putin. we have to build a dialogue. this hacking thing has gotten serious for three reasons. one, the number of hacks have grown dramatically. >> and you trace it to china? >> yes. >> and number two, the severity of where they are going. they have literally tried to hack into pipeline companies, in our national grid. and third, to the point you make, there are very direct pointing to groups like the comet group in shanghai and the chinese pla called 66198. and that group has directly been tied to hacking. >> i want to turn the conversation downtown to sue who wants to get in a question or
1:14 pm
two in on cyprus. >> yes, indeed. the finance minister has submitted his resignation as we look at this live picture of parliament. that is amid a nationwide outrage of a plan to tax bank accounts in exchange for a european bailout. that resignation has not been accepted, primarily because they want that finance minister to go to russia this evening and talk to vladimir putin of getting financial help. lawmakers are debating the bailout as we speak, as you watch that gentleman in parliament. the parliament still has to deal on that deal. those are live pictures of cyprus right now. a vote could happen any minute. smaller accounts could be spared a bit but all of that is very unclear. the banks remain closed, demonstrations are starting to take shape and our michelle ka rus michelle will have a live
1:15 pm
report later. >> keep our cash. get it in the bank. >> find the people responsible for this mess, prosecute them, put them in prison. >> obviously that gentleman is extremely mad. the other side of the story is also anger from russia on a deal to tax those banks accounts because so many russians keep their money in cyprus. so peter, my question to you is, as the finance minister is expected to go to russia tonight, how could russia retaliate? how could the russian government, because it is so angry, what will they do and what could they do? >> well, there are a lot of reactions they could have. first of all, it's hard for me to see shock. it's an island that created eight times of its economy in foreign deposits. most of those were from russia. we're talking about something like 20 billion euros, almost
1:16 pm
$40 billion worth. the fact is, they are going to be taxed. if you think about a banking system where the banking system is self is eight times the island of the economy, that's too big to succeed. forget too big to fail. if anything goes wrong with that, there's no way that the government can bail it out. here we are today, what can russia do. russia has two choices. they can play good cop or bad cop. the good cop, as i say, will help you out in exchange for some offshore rights for minerals that have not yet been developed. there are offshore gas reserves that it looks like cyprus could bring back to the party. if not, there are very significant enough, almost 40% of the countries in europe depend on russia for energy. russia is in the power position right now. don't accept that guy's resignation. >> we've got to leave it there. thank you very much. good to see you. >> good to see you. >> let's go to josh lipton for a
1:17 pm
quick market flash. >> juniper is down. goldman sachs does not like what it sees. sysco and alcatel loosening. price target, 17 bucks. sue, back to you. >> josh, as you know, cyprus is putting europe's crisis back in the spotlight. how much does our exposure here have over there? kayla tausche has more. >> exactly where their exposure to europe lays. we'll tell you about that. >> announcer: you can trust us. our account is now verified. from now on you'll see the verified badge next to our user name power lunch. keep in touch, america. the fed survey sponsored by
1:18 pm
norfolk southern. (train horn) vo: wherever our trains go, the economy comes to life. norfolk southern. one line, infinite possibilities.
1:19 pm
redesigned site has this new score planner tool with these cool sliders. this one lets us know what happens if we get new credit cards. oh. this one here lets us know what happens if they raise our credit card limit. yeah. what's this one do? i dunno. may i respond negatively about your porcelain poodle? this should be in the trash. score planner is free to everyone. free score applies with enrollment in fancy bear slider still in beta.
1:20 pm
blackrock is laying off nearly 300 workers as part of an effort started last year to grow the company by attracting new clients rather than through large acquisitions. shares of the world's largest money manager up about 40% over the past six months but down today by 345 to 251.80.
1:21 pm
the post plans to start charging for access to its website. you're going to get about 20 free articles a month and then you have to pony up. wapo is at 444.94, up $1.50. sue? >> raises questions about what kind of exposure u.s. banks have to europe, kale kayla tausche is looking at that for us. >> fearing to see capital tied up with counterparties in the eurozone, two caveats, banks have different calculations and we won't get fresh first quarter numbers until april. but the year-end numbers are interesting, especially with peripheral europe, greece, ireland, italy, portugal, spain. on that note, jpmorgan has the highest growth exposure, citi at
1:22 pm
21.6 billion. take a look at what happens when these banks offset these balances with hedges like credit default swaps, collateral, et cetera. it decreases the risk by half or more than half. smaller nominal exposure because their business mixes have more international scope and are a little bit more monolinear. several banks say they don't do business with cyprus banks since the country is so tiny and also because the bank has been pairing back exposure. the country where they are not pairing back risks, italy. year over year, sue, that was even before the papal boost to the economy. we'll update numbers, sue and tyler, at the end of the quarter. >> it went from boom to bust and now it is back to boom.
1:23 pm
diana olick has made a very well-timed trip to miami where they are running out of inventory. diana? >> reporter: that's right, tyler. six years ago i stood here in miami and told you that there were 49,000 brand-new condos here, who was going to buy them? fast forward to today, there are barely 2500 left and more going up. how did it happen? we'll tell you coming up next on "power lunch."
1:24 pm
there. i said it. they don't have pictures of my kids. they don't have my yoga mat. and still, i feel at home. could it be the flat screen tv? the not so mini fridge? ♪ the different free dinner almost every weeknight? or maybe, it's all of the above. and all the rest.
1:25 pm
am i home? nope. but it almost feels that way. homewood suites by hilton. be at home. i work for 47 different companies. well, technically i work for one. that company, the united states postal service®, works for thousands of home businesses. because at®, you can pay, print and have your packages picked up for free. i can even drop off free boxes.
1:26 pm
i wear a lot of hats. well, technically i wear one. the u.s. postal service®, no business too small. welcome back to "power lunch." i'm eamon javers. this is part of a for reason corrupt practice act, an investigation into microsoft's relationship with these business partners. dow jones reporting that lawyers from the department of justice and the s.e.c. are examining kickback allegations from a former representative in china and consultants in romania and italy. according to dow jones, they are quoting the vice president and deputy general counsel who says, like every large company with operations around the world, we sometimes receive allegations about potential misconduct by
1:27 pm
employees or business partners. we cooperate fully in any government inquiries. guys, as you know, the u.s. government has been ramping up its investigation into foreign corrupt practices act by multimajor corporations and this being looks like one part of the overall broadening of the u.s. department approaches on this. >> i know you'll be following this very closely for us. >> we're watching shares of kohl's which is down 4%. morgan stanley says higher payroll taxes will hurt the sales and the retailer will see increase competition when jcpenney reintroduces its sales and coupon models. ty? >> new permits for construction rising to the highest level since 2008. in one area of the market that is flying again, miami condos.
1:28 pm
how did it go from boom to bust and back to boom again? diana olick is in miami. hi, diana. >> reporter: hey, tyler. this concrete cell shows the whole story. it went belly up during the crash of 2007 and now a new developer has bought the place and has already sold more than half of the 250 units that will rise up from here over the next two years. >> buyers are coming in from all over the world, want a piece of the miami lifestyle, and have bought at a significant discount most of the inventory that was originally available. >> developing marina palms, using bank funding and private capital, it is a very different market today, all cash buyers with 20 to 80% down. >> they are going to scrutinize the buyer a great deal. they are going to scrutinize the developer's track record. they want people with experience. they want to know that you have
1:29 pm
hard deposits. >> reporter: but that doesn't mean that the fun is gone. the party is back in miami as developers use that miami heat and flash to lure a largely foreign and all-cash buyer. >> we've had great sales success. we p want to remind people to have fun. everyone is getting together and having a good time. if i could have more people hanging from chandeliers, i certainly would. >> reporter: south florida coastal markets has 103 new towers proposed. 40% of the developers themselves are from abroad. condo. >> caller: tur, peter, who has worked this market for decades, questions the developer's strategy. from everything you've seen over the last six years, you and i have been here many times. >> i know. >> reporter: this doesn't look crazy to you? >> it's mind boggling, how this could go forward this quickly, you need to rush the market and when it grabs up and having to
1:30 pm
deal with the bank. >> reporter: now, his concern is that right now you have rising prices. up 25% from a year ago. but rents are very strong with all this new supply that comes on, if the rents should falter and suddenly buyers say it's time to sell again, if you could have a glut of condos on this market yet again. there's a lot more online. >> thank you so much, diana. cardinal sales are getting hit hard today. the drug wholesaler says its contract with walgreens will not be renewed. cardinal's ceo is joining us first to talk about the impact on his earnings and it's one of the top 50 firms for female executives. see what he thinks about sheryl sandberg's new book. choose which accounts to track
1:31 pm
and use fidelity's analytics to spot trends, gain insights, and figure out what you want to do next. all in one place. i'm meredith stoddard and i helped create the fidelity guided portfolio summary. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account. otherworldly things. but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪
1:32 pm
1:33 pm
i'm sharon epperson at the nymex where gold is closing above the 1600 an ounce. a big reason for the gains and a lot of short covering here in the gold market. we're really seeing that in gold euros which is bouncing twice as much as we're seeing in gold
1:34 pm
price dollars and the outlier here is copper. certainly outweighing demand. look at all of the supply in the exchange houses. nearly double what it was back in october. back to you guys. >> sarah, thank you so much. bob pisani is joining me on the floor. we're going down but certainly not what it was this morning. >> no. but the point here is that we're tracking europe. as we urge talk that the ruling party in cyprus may not even support from the finance minister has likely resigned. we're not sure if his resignation has been accepted. and now take a look at the european markets versus the u.s. markets. these are etfs. it tracks perfectly. we're tracking europe right now. elsewhere, i want to point out, there are groups moving.
1:35 pm
airlines are having a great day and just turned negative on the home building and that's the good numbers on housing. i want to point out, oil service down for a second day in a row. >> 4% all the way down across the board. thank you, bob. appreciate it. kenny, come in here with o'neil securities. if the headline risk for europe is bad -- >> right. >> -- we're only down 45 points. >> we're right where we were in premarket trading. we bounce and launch forward again. it's testing that level again. if it tries to bounce one more time, my sense is that it's going to do that and go to the downside over the next couple of days. there's a lot of risk going on. >> and we have the fed meeting. >> which we're not going to get out of. we have the finance minister of russia going to meet --
1:36 pm
>> be careful what you wish for. >> isn't that the truth. >> thanks, kenny. see you later. let's go to the nymex. seema mody is following the numbers there. >> some of the risk-on sectors like technology are underperforming. take a look at the nasdaq. we're down 30 points on the day. a lot of focus on apple. that stock down more than 1%. today, one year back, apple announced its first dividend in 17 years. within tech, apple was the largest dividend payer in 2012. keep in mind the ratio with the earnings that it pays -- how much of the earnings it spent on its dividend is lower than the average of these foreign names, intel, ibm, cisco. back to you. >> let's go to josh lipton. >> sue, some headlines we want to bring you up to speed on.
1:37 pm
welsh holding has joined the bid to advise on a potential deal. that's why kkr and they have teamed up for a joint deal. roche is continuing its interest in gene sequencing. sue, back to you. >> thank you very much, josh. to the bond market now where all of the worries about europe and cyprus fell a little bit. rick santelli is here with the details. hi, rick. >> hello. you can see we're under 190. we haven't closed under 190 in two weeks. we're down seven basis points on the day. let's go to europe, the backyard so to speak. if you open that chart up to mid-december, we are making fresh low yields for 2013 in the boom complex. it's all about cyprus, the
1:38 pm
resignation, whether accepted or not, euro versus the yen. depending on the final close, tyler, it's all yours. >> rick, thanks very much. a really fascinating developing story in the art world. the fbi says it is getting closer to solving a $500 million heist that took place 23 years ago in boston. nbc news' justice correspondent pete williams is with us now. the fbi says they are making progress. what does that mean in this case? >> well, the reports come from the fbi itself and say they have made progress. they have never arrested anyone but now know who did the actual theft. they are not arresting them. they are not charging it with them because the statute of limitations has long since run. they are members of an organized crime organization that operates in the mid-atlantic and new england but say they've never been able to figure out whatever happened. now they know, based on some
1:39 pm
tips, that some of the art was taken to connecticut and some was taken to philadelphia and offered for sale ten years ago. they don't know where it is now. so what is this all about? it's all about two things, tyler. number one, they think that whoever was involved in the organized crime theft of these works, that it includes 13 masterpieces, three rembrandts, vemeer. they think a second generation has grown up knowing that these things are at home. they can't do anything, other than ten years try to move them in the art market. the thinking is that now somebody is thinking i know that was at my uncle's house, i've got it in the basement and i want to get rid of it. it's hot. what are the advantages of coming to the fbi? number one, the fbi says there will probably be immunity. they could charge whoever still has them with receiving and on keeping stolen property and,
1:40 pm
secondly, there is a $500 million reward. the fbi hopes that will be an incentive. >> fascinating. he recognize that self-portrait. pete williams, thank you very much. >> you're a very cultured guy. >> indeed he is. >> sue? >> take a look at cardinal health, they took a hit because they lost a distribution deal. the stock is trading down about 3%. standing right next to me, the ceo, he's first on cnbc and we'll talk about his stock and his company. plus, one year after announcing a dividend, will apple celebrate by boosting it? that's next on "power lunch." ♪
1:41 pm
[ laughter ] ♪ [ female announcer ] each one of us is our own boss. ♪ and no matter where you are in life, ask your financial professional how lincoln financial can help you take charge of your future. ♪ has an equally thrilling, lesser-known counterpart. conquer them with the exhilarating is 250. get great values on your favorite lexus models during the command performance sales event. this is the pursuit of perfection.
1:42 pm
a a retirement crisis on the horizon. maybe not on the horizon, it may be here right now. americans are not saving enough.
1:43 pm
28% of us now say we are not confident that we will have enough savings to retire, ever. that is the highest level of no confidence in the history of this survey. only 13% of workers say they are confident that they will have enough to retire. nearly 60% have less than 25,000 in savings and investments, excluding their homes and any pension plan they might have. in fact, only 57% say they are even saving for reirmt too. that's down from 55% back in 2009. of course, low interest rates make it tougher for private and public pension plans to make enough money to meet their commitments. the gap for pension plans, nearly $1.5 trillion. that's the shortfall. 34 states are in the danger zone. let's go to josh lipton. >> harley davidson is sputtering here. the problem is what the analysts
1:44 pm
are telling their clients, that sales at the dealer level for january and february may have been down 4 to 5%. they say the first quarter sales likely more negative than january and february. the analysts say the sales decline and it's more than just cyclical here. it's tied to a changing democ t demographic trend. sue, back to you. >> thank you very much, josh. shares of cardinal health down 6%. earlier they paired that loss a little bit down to 6 3/4. after walgreens and its partner alliance ended their distribution contract, walgreens signing a new ten-year deal and it's planning to take up a 23% stake in the company. higher on the news by 4% in walgreens. first on cnbc, a man who knows all about these changes is cardinal health ceo. mr. barrett is here to say that the company does not expect fiscal 2013 earnings to be hurt
1:45 pm
by the decision as the current deal with walgreens isn't placed until that time. good to have you here. >> thank you. >> you were talking to your market makers on a day when the street is punishing your stock but some think perhaps that is overdone because you already knew that distribution plan with walgreens was not giving you what you needed? >> well, it's always hard to know if the market is reacting too much or too little. the issue for us is we've worked over the last couple of years very hard at rebalancing our portfolio. we've expanded our business with the retail independent community. four years ago we had 4,000 independents. now we serve over 7,000. we expanded our position in pharmacy and ambulatory settings and where acute setting tends to be growing and in china in the last day or so, the closing of our and we've rebalanced the
1:46 pm
portfolio so we have growth beyond the customers. >> you mentioned china. tell me about the venture in china and do you worry at all with some of the issues that china is facing now, their economy, inflation, and also some of the tensions, quite frankly, between the united states and china. >> china has done a great deal for us. we've grown substantially since their acquisition. we've made a number of smaller acquisitions in china. health care is different than in china. it's in its early stages and an industry that has 12,000 distribution players along the channel. highly, highly fragmented. the chinese government is very much aware of that pro i had vooing health cavoo providing health care is going to be important. so health care has actually been a nice place to be in china. it's been a tremendous growth opportunity for us. it's been a business where we can build a platform, not just around pharmacy distribution but
1:47 pm
about medical distribution, pharmaceutical services. it's been a good market for us. >> that's good news to hear. your company is one of the top 50 companies for women executives. it's been listed on numerous, different publications and you have a very interesting mission statement when it comes to promoting female executives. this is the week and the month that sheryl sandberg put out her book talk ing about women movin up the workforce. >> it's about cardinal health and leadership and talent. it's not just about female engs executives. thankfully we recognize that having a talented group of women influences the work of our company. we've worked very hard at it. it's been very much in the news during this past week with the recent book, which by the way, i have not read but i will. it's a business imperative as much as anything else. we're in a service business. talent is everything. our ability to attract and
1:48 pm
promote the right talent is everything and having key positions filled by women, we have significant presence in our leadership team and board. >> as we wrap this up, 25% of the cardinal board of health is women and increase by 7% the number of women at senior vice president levels and above and two of your vice presidents are women. thank you for joining us. >> thank you. >> ty, up to you. >> sue, thank you very much. apple, as you well may know, sitting on $400 billion. is some of that going to come back to shareholders? we'll talk about that. and we'll talk about a new watch. right after this.
1:49 pm
coming up on street signs, do you notice how europe, sequestration, unemployment still high, we are talking about this being the teflon market. and we have pickens and ed rendell joining us for the infrastructure report. all of those things coming up at the top of the hour. back to you on "power lunch". >> mandy, thank you very much. one year ago today apple announced that it was going to begin paying a dividend, about
1:50 pm
$100 million in cash. shares are down almost 25% from a year ago. john forbes is here. john? >> i'm going to do a little rick santelli. let's break it down. $137 billion that apple has in cash but only 43 billion of that is actually in u.s. accounts. only about that much. that's what is available for apple to pay out in dividends without paying additional taxes. apple pays out about $10 billion annually. that's the rate that they are paying out in dividends. so the issue is how fast are they accumulating u.s. cash? well, it turns out at less than 4 billion per year. so if they boost the dividend by
1:51 pm
more than 30%, it raises the question that maybe they are drawing down their u.s. cash amount and maybe if they are drawing that down they need to do something like take out loans with some other companies. tyler? >> jon fortt, thank you for that rundown. speaking of the rundown, let's stay with it. jon fortt is going to stay with us and julia boorstin is going to join us to continue the apple discussion. how much should apple boost and what is the company doing with the 140 billion in cash. jon, do you have any ideas here? >> well, one of the challenges that apple has that i don't think many people are talking about, is in the supply chain. s samsung in dominant in screens and trying to get them to secure them with the right supplies and components. companies like sharp having trouble, lg losing money in phones. maybe apple needs to deploy more of their cash in the supply. maybe even an acquisition.
1:52 pm
>> an investment in their future. that's what jon says. julia, how about you? >> i'm with jon on acquisition. it obviously sells a lot of content but it's facing more competition than ever. it could buy twitter for $10 billion, netflix. apple has the kind of cash that it can make a serious acquisition to take the media business in a new direction. >> netflix is an interesting idea because apple tv does the same things that netflix does. all right. next, the battle between apple and samsung does. samsung is developing a wearitable digital watch after apple was working on a smart watch. is anybody going to do this, julia? is anybody going to wear these things? >> i think it's a great idea. it's a smart watch called the pebble. it raised over $10 billion on
1:53 pm
kickstarter. the website says that they have people that use these digital watches and i think there is demand out there, especially if you can combine in some sort of fitness functional. it will tell you how many miles you've walked or what your heart rate is. i think it could be big business here. >> real quick, jon, what do you think? >> you've got to sell tens and millions of these. google controls the good parts of android and lunless they are working with google, it won't have a lot of what people expect. and another major corporation gives social media a big fat thumbs down. we'll be back to talk about that and more as we continue the power rundown after this. ♪
1:54 pm
[ male announcer ] this is karen and jeremiah. they don't know it yet, but they're gonna fall in love, get married, have a couple of kids, [ children laughing ] move to the country, and live a long, happy life together where they almost never fight about money. [ dog barks ] because right after they get married, they'll find some retirement people who are paid on salary, not commission. they'll get straightforward guidance and be able to focus on other things, like each other, which isn't rocket science. it's just common sense. from td ameritrade.
1:55 pm
1:56 pm
is social is social media working for companies? coke has something to say about it and julia boorstin has more. >> that's right. online buzz or social chatter has no impact on short-term sales and it is the most popular brand on facebook with 62 million likes and 700,000 twitter followers. facebook actually agrees, saying quantity of chatter doesn't matter and citing a study of more than 600 campaigns that focused on getting the message in front of more people rather than generating more buzz had 70% more return on investment. coke has no plans on changing strategy saying that the display ads on facebook are 90% as effective as tv media. >> let's continue this conversation as we jump off it. i want to give you the results of our yahoo! finance poll.
1:57 pm
does facebook and social media influence what you buy? 3% said yes and 11% said from time to time and 86% said it never does. gm basically said they were not going to spend any money or time on social media because it was not working for them. >> gh had the opposite response that coke did. coke said the free buzz is not valuable but they are going to stick with their social ads. >> that's interesting. jon fortt, are you influenced by social media? i'm not on it so i'm not influenced. >> i'm on it quite a lot and learn quite a lot from it. they certainly hope it works. >> let's move on to something -- well, it's an interesting story. sheer bottoms are not going to be good for lululemon, pulling
1:58 pm
certain yoga pants that has a level of sheerness. it reequity. >>s about 17% of all of the pants in their stores. shares are p droing on the ne . dropping on the news. julia, any thoughts? i don't know what to ask. >> women want to buy the pair of pants and know what fits them and don't want to try them on in the store. this says to me it's a big problem and clear pants, translucent pants? please. >> not a good idea. >> go ahead, jon. >> i have actually been in lululemon as well with my wife. i think they may be throwing away these things too soon. those crazy kids are wearing all sorts of stuff. ought to sell them to the club set and mark them up. >> interesting thought, making l lemonade out of lemons. this is not the first product
1:59 pm
issue that lululemon has had in recent months. we'll be right back after this break. i'm a conservative investor. but that doesn't mean i don't want to make money. i love making money. i try to be smart with my investments. i also try to keep my costs down. what's your plan? ishares. low cost and tax efficient. find out why nine out of ten large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. ♪ [ male announcer ] it was designed to escape the ordinary. it feels like it can escape gravity. ♪


info Stream Only

Uploaded by TV Archive on